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Begin Part 2 of 2

Q: Where can you get a "real-time" value for the put/call ratio during the trade day? Also, where can you get end-of-day numbers for NASDAQ and S&P futures?

A: We have not found any place on the web that provides up to the second put/call information. The following site provides intraday data and refreshes every minute. http://www.astrikos.com/public/putcallwatch.html. For end of the day (and after hours) futures information, try http://cnnfn.cnn.com/markets/afterhours/.

Q: What rationale do you use to decide on both the Expiration Month and the Strike Price for the options you list?

A: We like to buy enough time to do the job, and we tend to err on the side of a bit more time just in case things do not go as we want. They are less volatile than current expiration options. For calls on individual stocks we prefer two months or more. For puts on stocks, current expiration or preferably the following if available. For strike prices, we prefer in the money to the extent that we can get a decent delta (70 or better) at a reasonable price for what we hope to make (our target) on the trade. In other words we won't pay $30 for an option in order to get a 75 delta if we only hope to make $2 on the move. We may not make that trade at all.

On index options, except for the fractional indexes (QQQ, DJX), time is very expensive and we will buy current month if we are outside of 2 weeks or so to expiration. We are not looking at holding the option long in any respect, so we are a bit more flexible. As for strike prices, on the fractional indexes we will look in the money to get us that decent delta. On the QQQ for example, about $8 in the money gets you a 70 to 75 delta. On the OEX, strikes are $10 apart, and we tend to play more at or slightly in the money as these options are pricey. If the OEX makes a move, it usually covers enough ground to makes us good money even with at the money.

THE PLAYS:

Note for reading plays: A "prior high" refers to the high at the start of a base.

All prices are current as of the close of trading Friday.

Best Plays:
1) BBI: A breakout and still a buy.
2) VZ: Ready to roll back up.
3) UCOR: Love this tight pattern.
4) SEM: Another breakout.
5) PII: Looks promising.
6) CERN: Ditto.
7) Puts: IFIN, TCB, CERS
8) KNDL: Nice flying plateau
9) STE: Could be making its move here.
10) GOTO: A nice shakeout.

Removed plays: RCGI moved higher but on lighter volume and will likely pull back. TGH, from the Thursday report, cut short its breakout move and pulled back to 68 on low volume. It is a buy at 70 on volume in the neighborhood of 426,000. Other dropped stocks are referred to throughout the report.

NEW PLAYS:

New High Breakout:

BBI (Blockbuster--$21.95; +.56; optionable): Specialty Retail
http://biz.yahoo.com/p/b/bbi.html
STATUS: Broke out from a cup with handle-type base after making a solid move Friday from the 10 day MVA (20) on strong volume (666,300; avg. 446,000). That handle price action has been volatile, but the stock settled down Wednesday and Thursday on decreasing volume, paving the way for this move. Buy point was 21.60 and it is still a buy. Target: 25-26. Money flow up sharply, and relative strength is breaking out.
BUY POINT: 22.13, on continued rising volume. Stop: 20.99 A buy on the breakout to 22.68.
POSITION: Stock and/or October $17.50 calls to buy (BBI JW).

A couple of rollers:

VZ (Verizon--$52.11; +0.11; optionalble): Telecom
http://biz.yahoo.com/p/v/vz.html
STATUS: Rolling between 52 and 57 and is currently at the dip in the pattern, showing a doji just above 52. The stock is riding down its 10 and 18 day MVAs, so we are looking, from here, for a break back over that plus the 200 day MVA at 53.06. On the move up, we will look at buying positions with stock or options, and when VZ peaks out up around 57 (if it does), selling calls on the stock, or simply selling the options, or shorting it for a move back down to the 52 range.
BUY POINT: Aggressive: 53, on rising volume (held steady Friday at 4.3 million, which is just at average daily volume). Stop: 51 (June lows) Selling point is on a move back down when the stock tops out at 57.
POSITION: Stock and/or October $45 calls to buy (VZ JI).

KLIC (Kulicke & Soffa--$15.20; +0.96; optionable): Semiconductor
http://biz.yahoo.com/p/k/klic.html
STATUS: In a rolling pattern since mid-May, moving up and down, generally, between 14-15 to 18. We are looking to play this one up from here, after the stock made a nice move off its 200 day MVA (14.20) on strong volume Friday (volume was down somewhat to 806,800, but still above the average of 668,000). We are looking for a roll back up from here to the 18 range where it may meet resistance and then turn back down to eventually hit 14-15 again. We like these kinds of patterns because they allow us to play the stock up and down, buying stock or options at the low and selling them at the high and then puts on the move down. Look for a move up from here (or over the 50 day MVA at 15.55) for entry points.
BUY POINT: Aggressive: 15.25, on rising volume. Stop: 14.50. Once the stock hits 18 and tops out (if it does), we can sell the stock and/or calls we bought and then look at the downside if the move stalls.
POSITION: Stock and/or October $12.50 calls to buy (KQS JV).

Double bottom:

HOTT (Hot Topic--$33.00; +1.26; optionable): Consumer non-durables
http://biz.yahoo.com/p/h/hott.html
STATUS: This stock has been making a comeback. HOTT just barely broke over the middle peak high in the pattern (33.06) to make a new closing high at 33.30 over a week ago, but then pulled back to test the 50 day and 18 day MVAs when it couldn't move higher. It bounced back up Thursday and Friday, the latter day on lower, below average volume of 460,200 (avg. 800,000). That points to a pullback unless volume rolls in. Whether it does or not, we are interested, and look for a move over the most recent high at 33.80; prior high in the 3-month base is 38.20 (May). HOTT is showing good money flow and buying, and our target is (for now) at that high: 38
BUY POINT: Aggressive: 34, on volume of 625,000 or higher. Stop: 32.50
POSITION: Stock and/or November $30 calls to buy (UHO KF).

Three small caps:

UCOR (Urocor--$17.45; -0.04; no options): Health Services.
http://biz.yahoo.com/p/u/ucor.html
STATUS: UCOR has made a solid move up from $4 over the past year. The stock made a huge breakout move in May and has since moved in a lateral range roughly between 15 and 17.50, holding its 50 day MVA (16.31) for support but for its last move down, which found support at 15. Its most recent move up has encountered the resistance of the recent highs, and this week has shown a straight row of tight dojis. Volume has been low (Friday 52,700; average 168,500) as it tightens over its 10 day MVA (17.24). A nice consolidation, and we will look for UCOR to finally break out. Target: 20.25.
BUY POINT: 17.81 on volume of 225,000. Stop: 16.90.
POSITION: Stock.

BPRX (Bradley Pharmaceuticals--$8.65; +0.49; no options): Drug Manufacturers
http://biz.yahoo.com/p/b/bprx.html
STATUS: Formed a 6-week base after pulling off the July high of 10.77 after a solid run up earlier that month. It has now corrected twice to the 50 day MVA (currently just above 7), posting higher lows as it tries to make it over resistance at 9. On rising volume since Wednesday when the stock broke back over the short term MVAs to make it to 9; the stronger volume can break it higher in the base here, but if not we can see a dip back to 8 (short terms) as the stock forms an ascending wedge movement. Friday's volume was at 432,800 (avg. 408,000), and the stock shows good money flow and buying. Initial target: 12
BUY POINT: Aggressive: 9, on above average volume (580,000 or better). Stop: 8
POSITION: Stock.

SEM (General Semi--$13.25; +0.55; optionable): Intergrated Circuits
http://biz.yahoo.com/p/s/sem.html
STATUS: The stock formed a short cup with handle base of 15 weeks, pulled back to the 18 day MVA early this week, and broke out over the handle high on Friday (buy point was 13.13). Volume was strong at 963,100 (avg. 358,000), and a continued breakout can help send SEM into the mid- right side of the larger18-month base. Prior high in the smaller pattern is at 13.65. Our target: Initially, 15-16. SEM shows super money flow and good buying.
BUY POINT: 13.40 on rising volume. A buy on the breakout up to 13.79, aggressive players can look at riding the move higher, then re-entering after a test of the breakout. Stop: 12.70
POSITION: Stock and/or December $10 calls to buy (SEM LB).

From previous reports and back on this weekend:

PII (Polaris--$49.35; +1.00; optionable): Automotive
http://biz.yahoo.com/p/p/pii.html
STATUS: Moved up in the handle to its 6-month cup with handle pattern. The "cup" is actually more of a v-bottom, so we will see if that does or does not adversely affect a breakout (it sometimes can). It has recovered well after that, however, and the pattern looks solid. The stock moved up from support at 48, and cleared a little ranging pattern it had set up on top of the 18 day MVA; volume was higher at 79,100 (avg. 76,000). Looking for a breakout; prior high in the base is at 51.65. Target: 58-61
BUY POINT: 50.63, on minimum breakout volume of 114,000. Stop: 49
POSITION: Stock and/or December $45 calls to buy (PII LI; low open interests)

CCEL (Cryo-Cell--$9.83; -0.22; no options): Health services.
http://biz.yahoo.com/p/c/ccel.html
STATUS: In a cup base dating back to March 2000 (prior basing high at 12.50), and CCEL last week broke from a four-week pennant-type handle. It hit 10.90 on the breakout but has come back to test the move, holding its 10 day MVA (9.67) to close and 18 day (9.36) at its lows. Volume has tapered nicely as it has drawn back, and we are looking for CCEL to bounce back up and take out the breakout high. Target on that move: 12.50.
BUY POINT: Aggressive: Over 10.33 on above average volume (237,000; Friday 166,200). Stop: 9.60. Breakout: 11.02 on above average volume. Stop: 10.25.
POSITION: Stock only.

CONTINUED PLAYS: TRMK lost the ascending wedge/pennant pattern, dropping to the 50 day MVA. We will watch it for a bounce back. SKYF doesn't look too bad, just isn't moving; we are removing (buy point is 21) but will keep an eye on it. PHTN was a bust, and THOR is doing its topping thing.

Trading plays: FFIV continued to run Friday, and if volume keeps rolling in just might be able to make our target (18.50-19). After a 4-day run it may pull back ahead of that, however. It's on a watchlist, as is PTMK, which is trying to hold on at 23 and 22 (our short sale play), though it still may take it down to 19.50-20 if things stronger selling hits.
NSM moved almost 2 points Friday, and at $33.62 is almost at our initial target at 35 (volume was lower). It needs stronger volume to make it, or it can pull back to the 32 level again. MCHP did gain 2 points, but volume was lower and well below average. It can pull back to 34, and has resistance at 36. AAS hit our target and is still a decent pattern, but since it did reach the goal we are removing it to make room for other plays.

OEX (Standard & Poors--$606.71; +13.78; optionable):
STATUS: Broke over the short term down trendline, and the 18 day MVA Friday as volume rose to 1.06 million (avg. 1.1 million). We are looking for a continued rally with the index moving to the 50 day MVA for a quick and aggressive upside play; the 50 day is at 617.20. At that point the thing may break down again; the resistance was too much for it earlier this month, too. Like the break of resistance, however.
BUY POINT: Aggressive: 607, on average or better volume. Stop: 601 (10 day MVA).
POSITION: September or October $600 calls to buy (OEY IT or JT).

SOX (Phili Semi--$594.91; +34.54; optionable):
STATUS: Broke above the 50 day MVA and closed right on top of it Friday. The 200 day MVA is at 615.57 and we may be able to get a move up to that level before the rally is over. A quick trade.
BUY POINT: 596 as the chips continue to rally. Stop: 593 (just below the 50 day MVA).
POSITION: September $580 calls to buy (SJX IP; 63 open interests).

BREAKOUT TO A NEW HIGH (or getting ready to):

OMG (Om Group--$65.19; +1.09; no options): Chemicals
http://biz.yahoo.com/p/o/omg.html
STATUS: OMG hit a new all-time closing high Friday as volume broke above average to 123,900 (avg. 101,000). The stock broke out of its cup with handle Tuesday, but pulled back slightly the next 2 days, until Friday's pop up from the previous session's doji. A nice move, so we are looking for it to continue if the market will let it. Our target is 73-76.
BUY POINT: 65.35 (over Wednesday's high) on volume of 125,000 and rising. Stop: 63.
POSITION: Stock.

TESTING THE BREAKOUT:

Continued Plays:

AOC (Aon--$38.48; -0.04; optionable): Insurance
http://biz.yahoo.com/p/a/aoc.html
STATUS: Nice pattern, moving laterally with three dojis for three days on low volume. That was up to 636,100 (avg. 896,000) Friday, bumping the stock back up from a test of apparently solid support at 38. AOC has been pulling back off the August high of 39.30 it reached after a nice breakout early in the month, and we quite like the tightening quality of the pattern. Initial target: 43
BUY POINT: 39.43, on volume in the range of 1 million. Stop: 38.
POSITION: Stock and/or October $35 calls to buy (AOC JG).

KNDL (Kendle Intl--$20.50; +0.45; optionable): Drug
http://biz.yahoo.com/p/k/kndl.html
STATUS: In a pullback and moving laterally above the 10 day MVA until Thursday, when it broke down and tested lower at the 18 day MVA, tapping again there on Friday's low of 19.95 before heading higher on stronger, above average volume of 103,700 (avg. 75,227). Good action, so we are looking for that breakout over 21.35. Super money flow, and buying is looking better all the time. Initial target: 25
BUY POINT: Over 21.35 on volume of 78,000 or higher. May pull back to test 21.35 once it gets over it; entry points on a move up from there. Stop: 20.
POSITION: Stock and/or November $17.50 calls to buy (KQR KW; 79 open interest).

WEDGES, PENNANTS, and FLYING PLATEAUS (AND FLAGS): These are some of our favorite patterns as the moves can be explosive. In this market, however, we need to see the move on the breakout on strong volume.

Ascending wedges:

Continued: SON dropped below the 50 day MVA Wednesday, and by Friday was still below the 18 day MVA despite strong volume. We'll keep watching it, but are removing to make room for better plays. GP doesn't look bad; it just doesn't thrill us at this point as it tries to settle into a clearer pattern, so we are removing it to a watch list, too. Buy point for that play is 37.78 on about 2 million volume.

CHRW (C.H.Robinson Worldwide--$30.83; -0.12; optionable): Transportation
http://biz.yahoo.com/p/c/chrw.html
STATUS: Ascending wedge. After Wednesday's promising move over the buy point (and on high volume), CHRW sold back immediately but Friday on below average volume held with a tap at the 18 day MVA (support since mid-July), closing higher with a loose doji. Still in good shape despite the disappointment last week, so we will hold out for another try at a breakout. Volume was back down to 160,400 (avg. 210,000). Target: 36
BUY POINT: 31.17 on volume in the range of 284,000. Stop: 30.50 (18 day MVA).
POSITION: Stock and/or November $30 calls to buy (CJQ KF).

Pennants: CPC, on the Thursday update, is still holding the pennant, but on strong, above average volume Friday could not make it up to the upper resistance in the pattern. We will watch it from here (buy point is 20.28 on volume of 147,000).

STE (Steris Corporation--$22.00; +0.50; optionable): Health Services
http://biz.yahoo.com/p/s/ste.html
STATUS: Moved higher in the ascending wedge pattern, with volume increasing slightly to 120,000 (avg. 248,000). Continue to look for the breakout on stronger volume. The stock hit a July high at 22.75, above other possible resistance in the pattern which in a more positive market would serve as the basis for the buy point, but we are playing it safe by using that previous high. Target: 26
BUY POINT: 22.88 on minimum breakout volume of 335,000. Stop: 21.27. A buy on the breakout up to 24.02
POSITION: Stock and/or December $20 calls to buy (STE LD).

BASING/TRADING RANGES:

Continued: Removing CWN. It has been inching higher and on Friday made a small move on rising volume, in addition to showing pretty good price/volume action over the last few days. We are keeping it on alert for the move up to our initial target at 10. TMCS: Keeping on watch; it showed a hammer doji Friday at the top of a three-day run, so will likely pull back again in its u-shaped base. Breakout point is 16.90. Removed SAGI as well; it needs to form a good handle.

GOTO (Goto.Com--$23.68; +0.92; optionable): Internet
http://biz.yahoo.com/p/g/goto.html
STATUS: Bouncing up its 50 day MVA, GOTO has moved laterally the past two weeks in a handle to its 11-week cup with handle. It is still well off of its all-time high, but the stock ran from $6 to $26 from April to June, and has corrected back into this pattern. Money flow remains huge as volume has virtually dried up on this lateral handle (265,700 Friday; average is 900,000). The stock moved up almost a point from support at the 18 day MVA (50 day is at 22). Continue to look for a breakout over the July high of 25.15. Initial target: 30.
BUY POINT: Breakout: 25.28, on volume of 1.4 million or better. Stop: 23.51
POSITION: Stock and/or November $20 calls to buy (GUO KD).

PUT PLAYS:

New Puts: After this week, financials are good stocks to look at for playing down. Some were really hammered Friday but others are just starting, or are on the verge. They may be starting new downtrends or are just getting hit. Either way, they seem ripe.

IFIN (Investors Fin Svcs--$65.70; -2.80; optionable): Assets
http://biz.yahoo.com/p/i/ifin.html
STATUS: Headed down for a loss Friday after hitting the 10 day MVA at 69. Volume was stronger at 346,800 (avg. 290,000). On a break of current support (IFIN bounced from a low of 65.29) on continued selling, we are looking at a target down at the June lows at 59. IFIN had been hanging at 70 for several days in a tight lateral consolidation, but was unable to get back over the 50 day MVA at 71.30.
BUY POINT: 65, on continued strong volume. Stop: 69
POSITION: October $80 puts to buy (FLQ VP).

TCB (Tcf Financial--$47.60; -2.00; optionable): Savings & Loan
http://biz.yahoo.com/p/t/tcb.html
STATUS: Sold to the 50 day MVA on strong volume of 667,900 (avg. 328,400) after holding above the 18 day MVA all month. On a break of the support on continued selling in the sector, we are looking for a drop to 42 or the 200 day MVA at 41.50. Watch 46 on the way down.
BUY POINT: 47, on continued strong volume. Stop: 48
POSITION: October $50 or $55 puts to buy (TCB VJ or VK).

COF (Capital One--$59.15; -1.06; optionable): Credit Services
http://biz.yahoo.com/p/c/cof.html
STATUS: The stock broke support of the 200 day MVA Tuesday (at 60.76) and has been unable to move back over the resistance despite high volume (up to 3 million Friday; avg. is 1.6 million). It dropped to 57.70 on the low, testing support there and then bouncing back up. On the momentum we can get a move back up to the 60 level but on another failure to break resistance, we will look at playing it down to 51. Watch 55.
BUY POINT: Aggressive: On a move down from 60 on strong volume. Below the July low: 57, on continued strong volume. Stop: 61 (just above the 50 day MVA).
POSITION: December $70 puts to buy (COF XN).

Continued Puts: BBY was up to the 50 day MVA on stronger volume; it can hail here, but we are putting it on a watchlist since support looks pretty sturdy, at least for now. RYAAY broke back over its 200 day MVA on strong volume; like BBY it closed just under the 50 day MVA, but the move was bullish. AMGN is definitely dropped in this category; it easily broke over its 200 day MVA Friday after breaking the 50 day Thursday, both days on strong volume. JCP looks weak, and on a move below 24 it can be a put, but the selling will have to be strong to take it down to the 200 day MVA at 18; it has potential support at 22 and 20 on the way down.

CERS (Cerus--$59.00; -1.00; optionable): Biotech
http://biz.yahoo.com/p/c/cers.html
STATUS: Still fighting the 200 day MVA, opening just lower and closing on the day with a loose doji. The stock hit a low of 56.79 and volume was huge at 497,900 (avg. 100,270). It may try to hit the 200 day MVA at 60.73, and if it fails, we will keep looking for that put play down to 55 for the initial target. That will be an aggressive play to be made in market selling, with the safer put play being below 55 (target 50).
BUY POINT: Aggressive: Below 59 on continued solid volume. Watch 55! Stop: 60.73 (200 day MVA).
POSITION: October $70 puts to buy (CEQ VN; 0 open interests).

DIGE (Digene--$30.20; +0.97; optionable): Drugs
http://biz.yahoo.com/p/d/dige.html
STATUS: DIGE moved up the last three days of the weak as predicted, but on decreasing volume, classic precursor action to a fall. It closed right at the 200 day MVA (30.40) and so we are looking for a turn back down, and if the stock begins to sell off, we are still eyeing our initial target at 25. Volume fell to 65,000 (avg. 116,000).
BUY POINT: Aggressive: Below 30.
POSITION: October $35 puts to buy (QDG VG; 0 open interests).

MSCC (Microsemi--$59.10; +4.75; optionable): Chip
http://biz.yahoo.com/p/m/mscc.html
STATUS: Still trying to make it back over the 50 day MVA (60.76) but volume was lower at 896,300 (avg. 809,000). We will look at buying puts for an aggressive play down to our initial target at 53-54, where MSCC has been establishing support over the last week, bouncing up and down on the high volume. This will be a quick drop, perhaps, back to that support. Below 53-54, the stock can drop on hard selling to 45 (200 day MVA).
BUY POINT: Aggressive: 59, on increasing volume in chip sector selling. Stop: 62.
POSITION: October $70 puts to buy (QMS VN; low open interests).

Good Investing!
Jon L. Johnson and your Technical Traders Report Team

All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP. or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners in Online Investment Services, LP. or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.

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